IRS Shuts Down Another High-Profile Asset Forfeiture Case, Gives $447,000 Back To Its Rightful Owners

from the sadly,-no-interest-will-be-collected-on-this-two-year-'loan' dept

Thanks to our nation’s tax laws and liberal asset forfeiture programs, the IRS can seize funds from a bank account if it believes the account holder is attempting to bypass income reporting requirements by making deposits under the arbitrary $10,000 cutoff. The IRS doesn’t need to obtain evidence of wrongdoing or even ever press charges against the account holders. It just takes the money, and it’s up to those whose accounts have been emptied to prove that they weren’t “structuring” their deposits.

Recently, it dismissed a structuring case against Carole Hinder, who had run her small, cash-only restaurant for nearly 40 years without incident before the IRS decided she was hiding money from it. It seized nearly $33,000, but seemed to reconsider its position after her case was covered by national press outlets like the New York Times.

The same seems to have happened here. Many of the reports on asset forfeiture also detailed the plight of the Hirsch family, whose convenience store distribution company’s account attracted IRS attention for the same reason. Asset forfeiture went into play and the IRS walked off with nearly a half-million of Bi-County Distribution’s money. Over two years later, the case is suddenly being dropped and the money returned to its rightful owners.

The government acknowledged in its agreement to return the money that the Hirsch brothers, who operate Bi-County, were never charged with any crime. In fact, all of the money deposited by the Hirsches was lawfully earned from their small business, according to the Institute for Justice, a libertarian law firm in Arlington, Va., that represented the Hirsches.

The Hirsch case was helped by the family’s retention of a forensic accountant, who prepared a report analyzing the company’s deposits and financial transactions and handed it over to federal prosecutors. However, it was not helped by the IRS’ refusal to make the next move after it seized the family’s money back in 2012.

During the two-and-a-half years that the government held the money, federal prosecutors filed no formal action in court to complete the forfeiture, which deprived the Hirsch brothers of an opportunity to contest the seizure in court.

So, media heat or not, it took a lawsuit filed by the Hirsch family to finally regain the $447,000 from the IRS. The settlement doesn’t do much for the family who spent more than two years fighting this, as the agreement stipulates each party is responsible for its own legal fees. This will hit the Hirsches harder than it hits the US government since only the former party will be paying out of its own pocket.

In the settlement agreement [pdf link], the government disingenuously dodges admitting wrongdoing and even adds in wording stating that the return of the funds does not release the family or its company from “any potential criminal liability.” This leaves room for the IRS to make another run at the Bi-County Distribution if it wishes, although I would imagine the harsh light of unwanted publicity means this will be the last we hear of this particular asset forfeiture case.

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Companies: bi-county distribution

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Comments on “IRS Shuts Down Another High-Profile Asset Forfeiture Case, Gives $447,000 Back To Its Rightful Owners”

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24 Comments
Anonymous Coward says:

Re: What I want to see

The ATF Department was responsible for that, not Holder. The reason Holder gets the blame for that is because the ATF has no department head to blame, because the senate has refused to approve a head of the ATF for over a decade, no matter who Bush or Obama nominated.

Holder has done a lot that he deserves blame for, but Fast and Furious isn’t one of them.

RD says:

Re: Re: What I want to see

“Holder has done a lot that he deserves blame for, but Fast and Furious isn’t one of them.”

Happened on his watch – it’s his responsibility. After all, if it’s a good enough way to place blame for Presidents (shifting the blame from the actual person to the successor just because it came to light later) then it’s good enough for that criminal.

Anonymous Coward says:

Re: Re: Re: What I want to see

“Happened on his watch – it’s his responsibility. After all, if it’s a good enough way to place blame for Presidents (shifting the blame from the actual person to the successor just because it came to light later) then it’s good enough for that criminal.”

The Great Recession happened on Bush’s watch, but Republicans act like everything was great until the day Obama took office.

mb (profile) says:

Your Country Is Broken

This is just another fine example of how completely broken everything the US government, and legal system is.
There are so many end runs around any sort of reasonable due process, that it is a complete delusion to believe Americans are not living in a totalitarian regime. (unless you are wealthy, then you can just buy your own version of “law”)

Sneeje (profile) says:

Struggling a bit...

This posting most likely has it right, but the settlement agreement refers to form 8300, which is not the FinCEN form associated with deposits, it is the form associated with the conversion of cash into other assets or services.

In other words, this maybe isn’t about deposits, but about the conversion of >=$10K cash into other assets or the conversion of assets into cash.

Anonymous Coward says:

And how much are they going to fine themselves and recompensate this person for interfering with their life for no god damn good reason……..i think in proportion to the stress it may or may not of caused should be suffice……….i think the same math the mpaa use, that equivelates a bunch of songs on an ipod being a value running in the millions should apply………maybe then they’d take a look at that kinda “math” in the future with more scrutiny and learn to recognise it, instead of being “foolled” every!single!time!

Vincent Clement (profile) says:

This is just an example of legislative and enforcement creep. You create a law in response to a supposed problem, say like reporting cash transactions of $10,000 or more. So people start depositing $9,999. Well, the government doesn’t like that you figured out how to comply with the law. Only in the eye of the government can someone be breaking the law by following it.

The same applies to those jurisdictions who have a ‘warn range’ for blood alcohol levels. 0.08 is the legal standard in most jurisdictions that results in a criminal offence.

Well, people started to drink less, which meant less people being charged with drunk driving. So governments came up with the 0.05 to 0.08 warn range and can suspend your licence (in the Province of Ontario, the first warn range offence is a three-day suspension and a $150 penalty) if you blow in that range. No blood test has been taken and you haven’t done anything criminally wrong, but you are doing something ‘illegal’ in the eye of the government, so pay up.

Anonymous Coward says:

Easy CHEAT!

They shutdown the forfeiture to avoid summary judgement.

Most corrupt judges would dismiss a client case against them because they are just that kind of a dirt bag.

The government needs to take not that this is why the Ferguson Riots happened… not ‘JUST’ because a minority was shot, but because there is a systemic and progressive corruption that has corroded the entire system of justice here.

People are getting to close to snapping and before we all know it, all fucking hell will have broken loose and the people in power just seem to give zero fucks about it.

Pragmatic says:

Re: Easy CHEAT!

Excuse me while I adjust my tinfoil hat: it’s not that they don’t know that America is becoming a powder keg, it’s that they do. The private prison industry is counting on it.

At that point you’ll realize that your Second Amendment gun rights aren’t worth a damn because the Establishment own the national media outlets. Anyone who questions the status quo NOW is considered a POTENTIAL terrorist. So what do you think will happen if you take up arms against it?

That’s your problem.

We need to get the numbers and fight this at the ballot, not with bullets. Any attempt at open, armed revolt would result in the authoritarian crackdown they’ve spent DECADES preparing for.

/tinfoil

Personanongrata says:

The Fish Rots from the Head

The fractions of Americans operating within the IRS (US government) are sickening to behold.

These baseless US government seizures of American citizens property is what a person would expect to occur in the Peoples Democratic Republic of Korea (North Korea) and/or other locales governed by totalitarian governments.

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